Information Transparency in B2B Auction Markets: The Role of Winner Identity Disclosure

34 Pages Posted: 11 Apr 2017 Last revised: 13 Apr 2017

See all articles by Yixin Lu

Yixin Lu

George Washington University - School of Business

Alok Gupta

University of Minnesota - Twin Cities - Carlson School of Management

Wolfgang Ketter

University of Cologne - Institute of Energy Economics; Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management; Erasmus Research Institute of Management (ERIM)

E. van Heck

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management

Date Written: April 10, 2017

Abstract

We study the impact of information transparency in B2B auctions. Specifically, we measure the effect of concealing winners’ identities on auction outcomes using a large-scale, quasi-natural field experiment. Contrary to the conventional wisdom that “the more information, the better,” we find that concealing winners’ identities leads to a significant increase in price by approximately 6%, and such effect holds true across both online and offline channels as well as different types of bidders. We further explore the mechanism that drives the observed effect. The empirical analysis suggests that the price increase may primarily stem from the disruption of imitative bidding which relies on the identification of fellow competitors. Our findings have important implications for the design of auction markets, especially multi-channel B2B markets.

Keywords: Auction design, field experiment, information transparency, identity disclosure, sequential auctions

Suggested Citation

Lu, Yixin and Gupta, Alok and Ketter, Wolfgang and van Heck, Eric, Information Transparency in B2B Auction Markets: The Role of Winner Identity Disclosure (April 10, 2017). Available at SSRN: https://ssrn.com/abstract=2949785 or http://dx.doi.org/10.2139/ssrn.2949785

Yixin Lu

George Washington University - School of Business ( email )

Washington, DC 20052
United States

Alok Gupta

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

Wolfgang Ketter (Contact Author)

University of Cologne - Institute of Energy Economics ( email )

Alte Wagenfabrik
Vogelsanger Strasse 321a
Cologne, 50827
Germany

HOME PAGE: http://ewi.uni-koeln.de/en/

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

HOME PAGE: http://www.rsm.nl/energy

Eric Van Heck

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 2032 (Phone)
+31 10 408 9010 (Fax)

HOME PAGE: http://people.fbk.eur.nl/eheck/personal/

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